Russia's economy on track for gradual recovery - President Vladimir Putin

Speaking at an annual end-of-year news conference on Friday, Russian President Vladimir Putin said that the country's economy was on track for a gradual recovery. Slump in oil prices and the subsequent ruble crisis pushed Russia's economy into the longest recession in two decades.

Putin said that Russia's economic contraction is slowing, capital flight is fading and real wages are starting to recover. He said the Russian economy was on track to contract by 0.5-0.6 percent this year, while inflation for the whole of 2016 was likely to reach 5.5 percent. Putin said the budget deficit was seen at 3.7 percent of gross domestic product (GDP), while net capital outflow was seen at up to $17 billion.

“A positive trend has emerged, and in recent months we observe very modest, but still growth in real wages in the real sector of the economy,” said the president, stressing that economic difficulties still remain.

The president said he supports the clean-up of the banking system being carried out by the country's central bank and added that regulation should be eased for smaller banks. He also stressed that Russia has no intention to isolate itself from the world and should be part of the global economy.

According to a report published by the International Monetary Fund (IMF) last month, Russia's 2016 forecasts were revised upward, seeing a contraction of just 0.6 percent. For 2017, the IMF continues to forecast economic expansion in Russia at a "subdued" rate of 1.1 per cent, helped by a modest recovery in oil prices.

"The Russian economy is emerging from recession after the dual shocks of the drop in oil prices and international sanctions over military intervention in Ukraine", the International Monetary Fund said in a report.